Article 65 of the Constitution provides
that a non citizen cannot own a freehold estate but can own a leasehold estate
for a period of 99 years. The Kenyan Constitution and the Lands Act (Act No. 6
of 2012) and the Land Registration Act (Act No. 3 of 2012) provide that
foreigners or non-citizens can only own land under a leasehold tenure not
exceeding ninety nine (99) years. In other words, it is only Kenyan
citizens who can hold land on freehold tenure basis.
Further the drafters of the constitution
realized that foreigners can incorporate companies and trusts and own land
through these entities and therefore Article65(3) (a) and (b) of the
constitution provides that for a company
to own a freehold it must be a company wholly owned by Kenyans and for a trust the trustees must hold the land for people who
are citizens.
It is important to note that, under the
Land Control Act (Chapter 302 of the Laws) of Kenya, a non-citizen can
only own agricultural land if it is an initial grant from the Government or
after obtaining a presidential exemption to acquire the land. This is
because the Land Control Act provides that agricultural land can only be
purchased after consent has been granted and this consent cannot be granted to
foreigners or private companies purchasing land.
From the above provisions of the law it
follows that a foreigner cannot purchase a freehold in Kenya but can purchase a
leasehold for a period not exceeding 99years and if he purchases a freehold,
then the law presumes that the freehold has been converted into a leasehold,
which conversion cannot be reversed even when the land is now sold to a
citizen.
It therefore follows that a foreigner cannot
purchase a freehold but he can have his interests in a freehold protected in
the following ways;
- By registering a company owned by Kenyans and become one of the directors and thereafter the company should buy the freehold and since he is a director it cannot be sold without his consent.
- By becoming a debenture holder in a company where the security offered to him is the freehold, that is; gets into a lending agreement (debenture) with a new or existing company, and the money lent is used to purchase the freehold and thereafter the freehold is used as a security in favor of the foreigner as a debenture holder.
